National Guard Pension Fund Principal Results of Actuarial Valuation as of December 31, 2014

Transcription

1 National Guard Pension Fund Principal Results of Actuarial Valuation as of December 31, 2014 Board of Trustees Meeting Larry Langer and Mike Ribble October 22, 2015

2 National Guard Pension Fund Principal Results of December 31, 2014 Valuation Valuation results as of 12/31/ /31/2013 Active Members Number 5,661 5,535 Retired Members and Survivors of Deceased Members Currently Receiving Benefits Number 4,421 4,354 Annual Pensions $ 8,299,998 $ 7,741,246 Terminated Members and Survivors of Deceased Members Entitled to but Not Yet Receiving Benefits Number 5,317 5,117 Deferred Pensions $ 9,081,954 $ 8,148,730 Assets Actuarial Value (AVA) $ 109,291,873 $ 103,299,516 Market Value $ 108,937,947 $ 104,026,294 Actuarial Accrued Liability (AAL) $ 151,066,064 $ 140,021,617 Unfunded Accrued Liability (AAL-AVA) $ 41,774,191 $ 36,722,101 Funded Ratio (AVA/AAL)* 72.3% 73.8% 1

3 National Guard Pension Fund Principal Results of December 31, 2014 Valuation Contributions for Fiscal Year Ending 6/30/2017 6/30/2016 Recommended Employer Contributions Normal Cost $ 572,610 $ 530,751 Accrued Liability 6,349,473 5,342,184 Total $ 6,922,083 $ 5,872,935 Anticipated Accrued Liability Payment Period 12 years 12 years Actuarially Determined Employer Contribution (ADEC) Normal Cost $ 572,610 $ 530,751 Accrued Liability 6,349,473 5,342,184 Total $ 6,922,083 $ 5,872,935 Impact of Legislative Changes NA 1,193,364 Final ADEC NA $ 7,066,299 Liquidation Period 12 years 12 years 2

4 Certification The assumptions, methods, and plan provisions used in the results presented in this presentation were provided in October 2015 in the Report on the Actuarial Valuation of the prepared as of December 31, The results were prepared under the direction of Michael Ribble and Larry Langer who meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinions contained herein. These results have been prepared in accordance with all applicable Actuarial Standards of Practice, and we are available to answer questions about them. Future actuarial measurements may differ significantly from current measurements due to plan experience differing from that anticipated by the economic and demographic assumptions, increases or decreases expected as part of the natural operation of the methodology used for these measurements, and changes in plan provisions or applicable law. Michael A. Ribble, FSA, EA, MAAA Principal, Consulting Actuary Larry Langer, ASA, EA, MAAA Principal, Consulting Actuary 3

5 Questions? THANK YOU 4

6 North Carolina National Guard Pension Fund Report on the Actuarial Valuation Prepared as of December 31, 2014 October 2015

7 2015 Xerox Corporation and Buck Consultants, LLC. All rights reserved. Xerox and Xerox and Design are trademarks of Xerox Corporation in the United States and/or other countries. Buck Consultants is a registered trademark of Buck Consultants, LLC in the United States and/or other countries. BRXXXX. Other company trademarks are also acknowledged. Document Version: 1.0 (July 2014).

8 Buck Consultants, LLC A Xerox Company Quorum Drive Suite 200 Dallas, TX October 7, 2015 Board of Trustees Teachers' and State Employees' Retirement System of North Carolina 3200 Atlantic Avenue Raleigh, NC P: F: Members of the Board: We submit herewith our report on the actuarial valuation of the National Guard Pension Fund of North Carolina (referred to as the Fund ) prepared as of December 31, The report has been prepared in accordance with Chapter 127A of the North Carolina General Statutes. The primary purpose of the valuation report is to determine the required employer contribution rates, to describe the current financial condition of the Fund, and to analyze changes in such condition. In addition, the report provides information that the Office of the State Controller (OSC) requires for its Comprehensive Annual Financial Report (CAFR) and it summarizes census data. Use of this report for any other purposes or by anyone other than OSC and its auditors may not be appropriate and may result in mistaken conclusions because of failure to understand applicable assumptions, methods, or inapplicability of the report for that purpose. The attached pages should not be provided without a copy of this cover letter. No one may make any representations or warranties based on any statements or conclusions contained in this report without Buck Consultants written consent. The valuation is based upon membership data and financial information as furnished by the Retirement Systems Division and the Financial Operations Division and as summarized in this report. Although reviewed for reasonableness and consistency with the prior valuation, these elements have not been audited by Buck and we cannot certify as to the accuracy and completeness of the data supplied. The valuation is also based on benefit and contribution provisions as presented in this report. If you have reason to believe that the plan provisions are incorrectly described, that important plan provisions relevant to this valuation are not described, or that conditions have changed since the calculations were made, you should contact the authors of this actuarial report prior to relying on this information. The valuation is further based on the actuarial valuation assumptions, approved by the Board of Trustees, as presented in this report. We believe that these assumptions are appropriate and reasonable and also comply with the requirements of GASB Statement No. 67. We prepared this valuation in accordance with the requirements of this standard and in accordance with all applicable ASOPs.

9 Board of Trustees October 7, 2015 The economic assumptions with respect to investment yield, salary increase and inflation have been based upon a review of the existing portfolio structure as well as recent and anticipated experience. The latest assumptions were adopted for use with the December 31, 2009 actuarial valuation, based on the experience study prepared as of December 31, 2009 and adopted by the Board of Trustees on October 21, The next experience study will be prepared as of December 31, 2014 and will be presented to the Board in October Assumptions and methods based on this experience study, as adopted by the Board, will be used with the December 31, 2015 valuation. Future actuarial measurements may differ significantly from current measurements due to plan experience differing from that anticipated by the economic and demographic assumptions, increases or decreases expected as part of the natural operation of the methodology used for these measurements, and changes in plan provisions or applicable law. Because of limited scope, Buck performed no analysis of the potential range of such future differences. The undersigned meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinions contained in this report. This report has been prepared in accordance with all applicable Actuarial Standards of Practice, and we are available to answer questions about it. Respectfully submitted, Michael A. Ribble, FSA, EA, MAAA Principal, Consulting Actuary Larry Langer, ASA, EA, MAAA Principal, Consulting Actuary MAR:km \NC\VAL\2014NATIONALGUARD.DOCX Page 2

10 Table of Contents Section 1: Summary of Principal Results... 1 Table 1 Summary of Principal Results... 1 Table 2 Reconciliation of Change in Annual Required Contribution... 2 Section 2: Membership Data... 3 Table 3 Membership of the Fund... 3 Section 3: Valuation Balance Sheet... 4 Table 4 Valuaiton Balance Sheet Showing the Present and Prospective Assets and Liabilities... 4 Section 4: Asset Allocation... 5 Table 5 Allocation of Investments by Category... 5 Section 5: Comments on Experience and Gains... 6 Table 6 Reconciliation of Change in Unfunded Actuarial Accured Liability Since the Prior Valuation... 6 Section 6: Contributions Payable by the State... 7 Table 7 Annual Contributions Payable by the State... 7 Section 7: Accounting Information... 8 Table 8 Number of Active and Retired Participants... 8 Table 9 Schedule of Changes in Net Pension Liability (Asset)... 9 Table 10 Net Pension Liability (Asset)... 9 Table 11 Sensitivity of the Net Pension Liability (Asset) to Changes in the Discount Rate Table 12 Additional Information for GASB Statement No Appendices Appendix A Development of Actuarial Value of Asset Appendix B Amortization Schedule for Unfunded Actuarial Accrued Liability Appendix C Actuarial Assumptions and Methods Appendix D Summary of Main Benefit and Contribution Provisions Appendix E GASB 67 Fiduciary Net Position Projection Appendix F Detailed Tabulations of the Data... 21

11 Section 1: Summary of Principal Results 1. This report, prepared as of December 31, 2014, presents the results of the actuarial valuation of the Fund. For convenience of reference, the principal results of the valuation and a comparison with the preceding year's results are summarized below. Table 1: Summary of Principal Results Valuation results as of 12/31/ /31/2013 Active Members Number 5,661 5,535 Retired Members and Survivors of Deceased Members Currently Receiving Benefits Number 4,421 4,354 Annual Pensions $ 8,299,998 $ 7,741,246 Terminated Members and Survivors of Deceased Members Entitled to but Not Yet Receiving Benefits Number 5,317 5,117 Deferred Pensions $ 9,081,954 $ 8,148,730 Assets Actuarial Value (AVA) $ 109,291,873 $ 103,299,516 Market Value $ 108,937,947 $ 104,026,294 Actuarial Accrued Liability (AAL) $ 151,066,064 $ 140,021,617 Unfunded Accrued Liability (AAL-AVA) $ 41,774,191 $ 36,722,101 Funded Ratio (AVA/AAL)* 72.3% 73.8% Contributions for Fiscal Year Ending 6/30/2017 6/30/2016 Recommended Employer Contributions Normal Cost $ 572,610 $ 530,751 Accrued Liability 6,349,473 5,342,184 Total $ 6,922,083 $ 5,872,935 Anticipated Accrued Liability Payment Period 12 years 12 years Actuarially Determined Employer Contribution (ADEC) Normal Cost $ 572,610 $ 530,751 Accrued Liability 6,349,473 5,342,184 Total $ 6,922,083 $ 5,872,935 Impact of Legislative Changes NA 1,193,364 Final ADEC NA $ 7,066,299 Liquidation Period 12 years 12 years * The System s Funded Ratio is not intended to measure the adequacy of funding in any analysis of a possible settlement of plan liabilities, nor is it intended to assess the need for or the amount of future contributions. Additionally, the measurement of a Funded Ratio using the Market Value of Assets would not be materially different. 1

12 Section 1: Summary of Principal Results 2. The following table shows a reconciliation of the change in the annual required contribution computed to be $5,872,935 based on the December 31, 2013 valuation and $6,922,083 based on the December 31, 2014 valuation. Table 2: Reconciliation of Change in Annual Required Contribution (ARC) Fiscal year ending June 30, 2016 Preliminary ARC (based on December 31, 2013 valuation) $ 5,872,935 Impact of Legislative Changes 1,193,364 Fiscal year ending June 30, 2016 Final ARC $ 7,066,299 Change Due to Demographic (Gain)/Loss (57,239) Change Due to Investment (Gain)/Loss 12,107 Change Due to Contributions Greater than ARC (99,084) Fiscal year ending June 30, 2017 Preliminary ARC (based on December 31, 2014 valuation) $ 6,922, Tables summarizing the membership of the Fund as of the valuation date are shown in Section The valuation balance sheet showing the assets and liabilities of the Fund as of the current and previous valuation dates is provided in Section An allocation of investments by category is shown in Section Comments on the experience and actuarial gains during the valuation year are provided in Section Comments on the contributions payable by the State are provided in Section Accounting information to be disclosed in the financial statements of the System and the employer is provided in Section Appendix A of this report presents the development of the actuarial value of assets. 10. Appendix B of this report presents the development of the amortization of the unfunded accrued liability. 11. Appendix C of this report outlines the full set of actuarial assumptions and methods employed. 12. Appendix D gives a summary of the benefit and contribution provisions of the system. 13. Appendix E provides the projection of cash flows used to determine the discount rate under GASB Statement No Appendix F provides detailed tabulations of the membership of the system as of the valuation date. 2

13 Section 2: Membership Data Data regarding the membership of the Fund for use as a basis for the valuation were furnished by the Retirement Systems Division. The following table summarizes the membership of the Fund as of December 31, 2014 upon which the valuation was based. Detailed tabulations of the data are given in Appendix F. Table 3: Membership of the Fund as of December 31, 2014 Member Average Average Count Age Service Annual Pensions Active Members 5, N/A Retired Members and Survivors of Deceased Members Currently 4, N/A $ 8,299,998 Receiving Benefits Terminated Members and Survivors of Deceased Members Entitled to 5, N/A $ 9,081,954 Benefits but Not Yet Receiving Benefits 3

14 Section 3: Valuation Balance Sheet The following valuation balance sheet shows the assets and liabilities of the Retirement Fund as of the current valuation date of December 31, Appendix A summarizes the development of the actuarial value of assets. Table 4: Valuation Balance Sheet Showing the Present and Prospective Assets and Liabilities of the North Carolina National Guard Pension Fund Prepared as of December 31, 2014 Present Assets $ 109,291,873 Present Value of Prospective Contributions Payable by State Assets Normal Contribution $ 2,924,460 Accrued Liability Contribution $ 41,774,191 Total Prospective Contributions by State $ 44,698,651 Total Assets $ 153,990,524 Liabilities Present Valure of Pensions Payable to Retired Members and Survivors of Deceased Members Currently Receiving Benefits $ 66,129,919 Present Value of Deferred Pensions Payable to Terminated Members and Survivors of Deceased Members Entitled to Benefits but Not Yet Receiving Benefits $ 62,057,661 Present Value of Prospective Pensions to Active Members Included in the Valuation $ 25,802,944 Reserve for Increases in Retirement Allowances $ 0 Total Liabilities $ 153,990,524 The valuation balance sheet shows that the total present value of the prospective benefit payments as of December 31, 2014 amounts to $153,990,524. Of this amount, $66,129,919 represents the present value of future pension payments to retired members and survivors of deceased members currently receiving benefits, $25,802,944 represents the present value of prospective pensions which will become payable to present active members and $62,057,661 represents the present value of future pension payments to terminated members and survivors of deceased members entitled to benefits but not yet receiving benefits. Against these liabilities, the Fund has assets of $109,291,873 leaving a balance of $44,698,651 to be provided by future contributions of the State. Of this amount, $2,924,460 represents the present value of prospective normal contributions, and the balance of $41,774,191 represents the present value of accrued liability contributions. 4

15 Section 4: Asset Allocation The following table shows an allocation of investments by category as of December 31, Table 5: Allocation of Investments by Category for the National Guard Pension Fund as of December 31, 2014 Cash and Receivables 2.0% Fixed Income (LTIF) 29.7% Public Equity 43.8% Other* 24.5% Total 100.0% * Real Estate, Alternatives, Inflation and Credit. 5

16 Section 5: Comments on Experience and Gains The following table shows a detailed reconciliation of the change in unfunded accrued liability since the prior valuation. Table 6: Reconciliation of Change in Unfunded Accrued Liability Since the Prior Valuation (in millions) Unfunded Actuarial Accrued Liability (UAAL) as of 12/31/2013 $ 36.7 Normal Cost during Reduction due to Actual Contributions during 2014 (6.4) Interest on UAAL, Normal Cost, and Contributions 2.5 Asset (Gain)/Loss 0.1 Actuarial Accrued Liability (Gain)/Loss (0.4) Impact of Legislative Changes 8.8 Unfunded Actuarial Accrued Liability (UAAL) as of 12/31/2014 $

17 Section 6: Contributions Payable by the State The normal contribution covers the cost of benefits based on current service. The valuation indicates that the annual normal contribution payable by the State is equal to $ multiplied by the number of active members. Based on 5,661 active members included in the valuation, the normal contribution is $572,610. The unfunded actuarial accrued liability is amortized within a 12-year period through an annual unfunded accrued liability contribution. Assuming that the unfunded accrued liability is amortized based on the amortization schedule shown in Appendix B, with the payments covering both the principal amount and the accruing interest thereon at the rate of 7.25% per annum, the annual unfunded actuarial accrued liability contribution would be $6,349,473. Based on the present membership and the amortization schedule described above, the following table shows the total annual contributions payable by the State for the fiscal year ending June 30, Table 7: Annual Contributions Payable by the State Contribution Annual Amount Normal Cost $ 572,610 Accrued Liability 6,349,473 Total $ 6,922,083 7

18 Section 7: Accounting Information The section contains the accounting information for Governmental Accounting Standards Board (GASB) Statement No. 67 for fiscal year ending June 30, 2015 based on a valuation date of December 31, Please note that GASB Statement No. 67 (Financial Reporting for Pension Plans) is applicable for fiscal years ending 2014 and later. The June 30, 2015 total pension liability presented in this section was determined by an actuarial valuation as of December 31, 2014, based on the assumptions, methods and plan provisions described in this report. The actuarial cost method used to develop the total pension liability is the Entry Age Normal Cost method, as required by GASB Statement No. 67. GASB Statement No. 67 set forth certain items of information to be disclosed in the financial statements of the Plan. The tables below provide a distribution of the number of employees by type of membership. Table 8: Number of Active and Retired Participants as of December 31, 2014 Group Number Retired members and survivors of deceased members currently receiving benefits 4,421 Terminated members and survivors of deceased members entitled to benefits but not yet receiving benefits 5,317 Active participants 5,661 Total 15,399 8

19 Section 7: Accounting Information GASB Statement No. 67 set forth certain items of information to be disclosed in the financial statements of the Plan. The tables below provide the schedule of changes in Net Pension Liability (Asset). Table 9: Schedule of Changes in Net Pension Liability (Asset) Calculation as of June 30, 2015 Total Pension Liability Service Cost $ 550,000 Interest 9,916,000 Changes of Benefit Terms 8,734,000 Difference between Expected and Actual Experience (198,000) Change of Assumptions 0 Benefit Payments, including Refund of Member Contributions (7,958,000) Net Change in Total Pension Liability $ 11,044,000 Total Pension Liability - Beginning of Year $ 140,206,000 Total Pension Liability - End of Year $ 151,250,000 Plan Fiduciary Net Position Employer Contributions $ 6,039,000 Member Contributions 0 Net Investment Income 2,493,000 Benefit Payments, including Refund of Member Contributions (7,958,000) Administrative Expenses (75,000) Other 0 Net Change in Fiduciary Net Position $ 499,000 Plan Fiduciary Net Position - Beginning of Year $ 110,030,000 Plan Fiduciary Net Position - End of Year $ 110,529,000 Table 10: Net Pension Liability (Asset) Calculation as of June 30, 2015 June 30, 2014 Total Pension Liability $ 151,250,000 $ 140,206,000 Plan Fiduciary Net Position 110,529, ,030,000 Net Pension Liability (Asset) $ 40,721,000 $ 30,176,000 Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 73.08% 78.48% 9

20 Section 7: Accounting Information The table below is the sensitivity of the net pension liability to changes in the discount rate. Table 11: Sensitivity of the Net Pension Liability (Asset) at June 30, 2015 to Changes in the Discount Rate 1% Decrease Current 1% Increase Discount Rate 6.25% 7.25% 8.25% Net Pension Liability (Asset) 58,365,000 40,721,000 26,090,000 The discount rate used to measure the total pension liability was 7.25%. The projection of cash flows used to determine the discount rate assumed that System contributions will continue to follow the current funding policy. Based on those assumptions, the System s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Please see Appendix E for additional detail. The table below provides the methods and assumptions used to calculate the actuarially determined contribution rate. Table 12: Additional Information for GASB Statement No. 67 Valuation Date 12/31/2014 Actuarial Cost Method Amortization Method Amortization Period Asset Valuation Method Actuarial Assumptions Entry Age Level dollar closed 12 years Investment Rate of Return* 7.25% Projected Salary Increases 20% of market value plus 80% of expected actuarial value (not greater than 120% of market value and not less than 80% of market value) N/A * Includes Inflation of 3.00% Cost-of-living Adjustments N/A 10

21 Appendix A: Development of Actuarial Value of Assets Asset Data the Year Ending 12/31/2014 (a) Actuarial Value of Assets at 12/31/2013 $ 103,299,516 (b) Contributions 6,393,403 (c) Benefit Payments (7,752,511) (d) Net Cash Flow: (b) + (c) (1,359,108) (e) Expected Investment Return: [(a) x 7.25%] + [(d) x 3.625%] 7,439,947 (f) Expected End of Year Actuarial Value of Assets: (a) + (d) + (e) 109,380,355 (g) End of Year Market Value of Assets 108,937,947 (h) Excess of Market Value over Expected Actuarial Value of Assets: (g) - (f) (442,408) (i) 20% Adjustment toward Market Value: (h) x 20% (88,482) (j) Preliminary Actuarial Value of Assets at 12/31/2014: (f) + (i) 109,291,873 (k) Final Actuarial Value of Assets at 12/31/2014: (j) not less than 80% of (g) and not greater than 120% of (g) 109,291,873 (l) Estimated Net Investment Return on Actuarial Value 7.16% (m) Estimated Net Investment Return on Market Value 6.07% 11

22 Appendix B: Amortization Schedule for Unfunded Actuarial Accrued Liability Date Established 12/31/2014 Original Outstanding Annual Balance Balance Payment December 31, 2009 $ 40,483,684 $ 35,481,410 $ 5,539,494 December 31, 2010 (2,911,753) (2,764,180) (398,423) December 31, 2011 (2,233,723) (2,272,304) (305,646) December 31, 2012 (515,855) (557,449) (70,586) December 31, ,219,347 4,525, ,345 December 31, ,361,464 7,361,464 1,007,289 Total $ 41,774,191 $ 6,349,473 12

23 Appendix C: Actuarial Assumptions and Methods Interest Rate: 7.25% per annum, compounded annually. Separations From Active Service: Representative values of the assumed annual rates of separation from active service are as follows: Age Under age 60 with 20 years of service Retirement Age 60 with 20 years of service or 30 years of service Annual Rates of Base Mortality* Male Female Disability** * Base mortality rates as of December 31, ** Applied only to members with less than 20 years of service. No rates of withdrawal are assumed since the valuation excludes all active members with less than 7 years of service. Deaths After Retirement: Representative values of the assumed post-retirement mortality rates as of December 31, 2003 prior to any mortality improvements are as follows: Annual Rates of death after retirement Age Male Retirees (Healthy at Retirement) Female Retirees (Healthy at Retirement) Male Survivors of Deceased Members Female Survivors of Deceased Members Male Retirees (Disabled at Retirement) Female Retirees (Disabled at Retirement)

24 Appendix C: Actuarial Assumptions and Methods Mortality Improvements: Representative values of the assumed mortality improvement rates (applied to pre-retirement mortality rates for active members and post-retirement mortality rates for retirees healthy at retirement and survivors of deceased members after such tables have been set back or set forward) are as follows: Age Male Projection Scale Female Projection Scale Deaths After Retirement (Non-Disabled): According to the RP-2000 Mortality tables for retirees. These tables are set forward two years for males and unadjusted for females. These tables are also set forward one year for male survivors of deceased members and set forward two years for female survivors of deceased members. The base retiree RP-2000 tables have no rates prior to age 50. The active employee rates of RP-2000 are used for ages less than 50 prior to any adjustments for set back or set forward Death After Disability: According to the RP-2000 Mortality tables for disabled annuitants set back six years for males and set forward one year for females. Deaths Prior to Retirement: According to the RP-2000 Mortality tables for active employees. These tables are set forward two years for males and unadjusted for females. The base RP-2000 tables for active employees have no rates after age 70. The rates from ages 71 to 79 are smoothed based on the active rates at age 70 and the retiree rate at age 80. Retiree rates are used for ages 80 and beyond. Mortality Projection (Non-Disabled): All mortality rates are projected from December 31, 2003 using generational improvement with Scale AA. Timing of Assumptions: All deaths, disabilities and retirements are assumed to occur on July 1 of each year. Administrative Expenses: No provision made. Actuarial Cost Method: Entry age normal cost method. Entry age is established on an individual basis. Gains and losses are reflected in the unfunded actuarial accrued liability. 14

25 Appendix C: Actuarial Assumptions and Methods Asset Valuation Method: Actuarial value, as developed in Appendix A. The actuarial value of assets recognizes a portion of the difference between the market value of assets and the expected actuarial value of assets, based on the assumed valuation rate of return. The amount recognized each year is 20% of the difference between market value and expected actuarial value. The actuarial value of assets is not allowed to be greater than 120% of the market value of assets or less than 80% of the market value of assets. Changes Since Prior Valuation: None. 15

26 Appendix D: Summary of Main Plan Provisions Membership All members of the North Carolina National Guard with seven years of service are eligible to be members of the Fund. Benefits Service Retirement Pension Condition for Pension Amount of Pension A member who retires after he has attained age 60 and has credit for 20 years of military service, including at least 15 years of North Carolina national guard duty, both reserve and active, and who has received an honorable discharge, is entitled to a monthly pension. The amount of the pension is equal to $105 per month for 20 years of creditable service with an additional $10.50 per month for each additional year of such service, provided that the total pension shall not exceed $210 per month. Deferred Early Retirement Pension Condition for Pension Amount of Pension Normal Form Optional Form A member whose service is terminated after he has credit for 20 years of military service, including at least 15 years of North Carolina national guard duty, both reserve and active, and who has received an honorable discharge, is eligible to receive a deferred retirement pension commencing at age 60. The amount is the same as that for a service retirement. Life Annuity. None. Contributions The State makes annual contributions sufficient to meet the cost of the benefits under the Fund. Changes Since Prior Valuation The monthly pension was increased from $99 per month for 20 years of creditable service with an additional $9.90 per month for each additional year of such service to $105 per month for 20 years of creditable service with an additional $10.50 per month for each additional year of such service. 16

27 Appendix E: GASB 67 Fiduciary Net Position Projection Table E-1: Projection of Fiduciary Net Positions (in thousands) Beginning Ending Calendar Fiduciary Member Employer Benefit Administrative Investment Fiduciary Year Position Contributions Contributions Payments Expenses Earnings Position 2015 $ 108,938 $ 0 $ 5,664 $ 10,795 $ 69 $ 7,708 $ 111, , ,350 10, , , , ,799 10, , , , ,773 11, , , , ,750 11, , , , ,728 11, , , , ,705 11, , , , ,679 11, , , , ,880 11, , , , ,279 12, , , , ,600 12, , , , ,757 12, , , , ,468 12, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,046 99, , , ,823 95, , , ,596 92, , , ,360 89, , , ,119 85, , , ,870 81, , , ,612 78, , , ,346 74, , , ,069 70, , , ,782 66, , , ,489 61, , , ,201 57, , , ,922 54, , , ,655 50, , , ,399 46, , , ,154 43, , , ,920 40, , , ,697 36, , , ,484 33, , , ,283 31, , , ,092 28, , , ,909 25, , , ,737 23, , , ,573 21, , , ,419 19,181 17

28 Appendix E: GASB 67 Fiduciary Net Position Projection Table E-1: Projection of Fiduciary Net Positions (continued) (in thousands) Beginning Ending Calendar Fiduciary Member Employer Benefit Administrative Investment Fiduciary Year Position Contributions Contributions Payments Expenses Earnings Position 2065 $ 19,181 $ 0 $ 0 $ 3,290 $ 0 $ 1,274 $ 17, , , ,137 15, , , ,008 13, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

29 Appendix E: GASB 67 Fiduciary Net Position Projection Table E-2: Actuarial Present Value of Projected Benefit Payments (in thousands) Present Value of Benefit Payments Beginning Funded Unfunded Funded Unfunded Using Single Calendar Fiduciary Benefit Benefit Benefit Payments at Payments at Discount Rate of Year Position Payments Payments Payments 7.25% 3.73% 7.25% 2015 $ 108,938 $ 10,795 $ 10,795 $ 0 $ 10,424 $ 0 $ 10, ,446 10,856 10, , , ,786 10,948 10, , , ,750 11,021 11, , , ,904 11,092 11, , , ,266 11,270 11, , , ,742 11,452 11, , , ,334 11,657 11, , , ,024 11,881 11, , , ,977 12,068 12, , , ,136 12,253 12, , , ,380 12,327 12, , , ,662 12,398 12, , , ,532 12,422 12, , , ,452 12,424 12, , , ,654 12,419 12, , , ,627 12,369 12, , , ,414 12,229 12, , , ,103 12,008 12, , , ,772 11,790 11, , , ,420 11,540 11, , , ,078 11,245 11, , , ,797 10,954 10, , , ,576 10,705 10, , , ,376 10,452 10, , , ,204 10,223 10, , , ,038 10,048 10, , , ,822 9,891 9, , , ,535 9,776 9, , , ,126 9,621 9, , , ,630 9,508 9, , , ,997 9,345 9, , , ,268 9,211 9, ,407 9,132 9, ,347 8,956 8, ,176 8,672 8, ,995 8,256 8, ,942 7,821 7, ,045 7,394 7, ,307 6,977 6, ,730 6,573 6, ,312 6,181 6, ,052 5,804 5, ,946 5,441 5, ,990 5,093 5, ,181 4,759 4, ,514 4,439 4, ,984 4,133 4, ,588 3,840 3, ,321 3,559 3,

30 Appendix E: GASB 67 Fiduciary Net Position Projection Table E-2: Actuarial Present Value of Projected Benefit Payments (continued) (in thousands) Present Value of Benefit Payments Beginning Funded Unfunded Funded Unfunded Using Single Calendar Fiduciary Benefit Benefit Benefit Payments at Payments at Discount Rate of Year Position Payments Payments Payments 7.25% 3.73% 7.25% 2065 $ 19,181 $ 3,290 $ 3,290 $ 0 $ 96 $ 0 $ ,165 3,030 3, ,272 2,779 2, ,501 2,538 2, ,852 2,304 2, ,325 2,079 2, ,920 1,863 1, ,637 1,656 1, ,475 1,460 1, ,433 1,274 1, ,508 1,100 1, , , , , , ,

31 Appendix F: Detailed Tabulations of Member Data Table F-1: The Number of Active Members Distributed by Age and Service as of December 31, 2014 Years of Service Age Under 1 1 to 4 5 to 9 10 to to to to to to & Up Total Under to , to , to to to to to to to & Up Total 0 0 1,448 1,569 1, ,661 21

32 Appendix F: Detailed Tabulations of Member Data Table F-2: The Number of Active Members Distributed by Age as of December 31, 2014 Age Number Total 5,661 22

33 Appendix F: Detailed Tabulations of Member Data Table F-3: The Number of Active Members Distributed by Service as of December 31, 2014 Service Number Total 5,661 23

34 Appendix F: Detailed Tabulations of Member Data Table F-4: The Number and Deferred Annual Retirement Allowances of Terminated Vested Members Distributed by Age as of December 31, 2014 Age Number Allow ances 23 1 $ 2, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,832 24

35 Appendix F: Detailed Tabulations of Member Data Table F-4: The Number and Deferred Annual Retirement Allowances of Terminated Vested Members Distributed by Age as of December 31, 2014 (continued) Age Number Allow ances $ 128, , , , , , , , , , , , , , , , , , , , , , , , , ,520 Total 5,317 $ 9,081,954 25

36 Appendix F: Detailed Tabulations of Member Data Table F-5: The Number and Annual Retirement Allowances of Retired Members Distributed by Age as of December 31, 2014 Age Number Allow ances $ 113, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,308 Total 4,421 $ 8,299,998 26